Your accounting system supports growth when it answers three questions on demand: which work actually makes money, when cash arrives and leaves, and what you can afford to commit to next. Most small business books answer none of them, because they are built to file a return rather than to run a company. Fixing that is mostly about how the chart of accounts is structured and what you look at each month, not about buying different software.
Track margin by revenue stream, not total revenue
Revenue tells you nothing about what to sell more of. Gross profit does.
Compare two jobs:
- $10,000 in revenue that costs $9,000 to deliver: $1,000 gross profit, a 10% margin.
- $6,000 in revenue that costs $2,000 to deliver: $4,000 gross profit, roughly a 67% margin.
The smaller job is four times better and uses less capacity. A revenue-only report ranks them backwards.
One prerequisite. Segment reporting only works if your chart of accounts supports it: direct costs separated from overhead, and a class, location, or job tag on every transaction. Shared overhead needs an allocation method before you split it, or you get precise-looking numbers that are wrong. Once that is in place, review margin by service line, product, or client type monthly if you have more than a handful of revenue streams. Quarterly is the floor, not the target.
Build a 13-week cash view, with a 12-month view behind it
Profit and cash run on different clocks. Invoice in January, pay your contractors in February, collect in March, and you have a profitable quarter with an empty operating account in February. That is a timing problem between receivables and payables, and the P&L does not show it.
The standard tool is a rolling 13-week (roughly 90-day) forecast, built weekly:
- List expected collections by week, based on actual invoice due dates and each customer's real payment behavior.
- Subtract expected outflows: payroll, rent, tax deposits, debt service, recurring vendors.
- Carry the running balance forward and look for the week it goes negative.
Ninety days is a liquidity tool, not a plan. If you have a long sales cycle, heavy seasonality, or a loan maturing, layer a 12-month view on top of it.
On reserves: our recommendation is three to six months of fixed operating expenses, and we present that as our recommendation, not as a rule. No government or standard-setting body publishes a required number. What should move your target is customer concentration, how long your receivables take, and how seasonal your revenue is. In Orlando, Jacksonville, and Miami, add one more factor: hurricane season runs June 1 through November 30, and a week of closure or a slow insurance payout is a cash event long before it is an accounting event. Florida businesses belong at the higher end of that range.
Two deductions that free up operating cash, and the traps in each
Mileage: 2026 has two rates, not one
The IRS revised the standard mileage rate mid-year because of fuel prices. If you drive for business in 2026, you have to split your log at June 30.
| Purpose | Jan 1 – Jun 30, 2026 | Jul 1 – Dec 31, 2026 |
|---|---|---|
| Business | 72.5 cents per mile | 76 cents per mile |
| Medical or qualified moving | 20.5 cents per mile | 23.5 cents per mile |
| Charitable | 14 cents per mile | 14 cents per mile (fixed by statute) |
A single annual mileage total cannot be converted into a correct 2026 deduction. Two buckets, two rates.
Four things people miss. The standard rate is optional; actual expenses are the alternative. For a vehicle you own, you must choose the standard rate in the first year the vehicle is available for business use, or you are locked into actual expenses for that vehicle. For a leased vehicle, whichever method you pick must be used for the entire lease, including renewals. And you cannot use the standard rate on a vehicle for which you previously claimed MACRS depreciation or a Section 179 deduction. Employees cannot deduct unreimbursed business mileage at all, because the repeal of miscellaneous itemized deductions was made permanent. If you are an owner-employee of an S corporation, the fix is an accountable plan reimbursement from the company.
Retirement: the deferral limit is not the ceiling
$24,500 is the 2026 employee elective deferral limit under Section 402(g). That is the starting point for an owner, not the maximum.
| 2026 limit | Amount |
|---|---|
| Employee elective deferral (§402(g)) | $24,500 |
| Catch-up contribution, age 50+ | $8,000 |
| Catch-up contribution, ages 60–63 | $11,250 |
| Total annual additions, employee + employer (§415(c)) | $72,000 |
| SEP IRA | Lesser of 25% of compensation or $72,000 |
| Compensation cap used in plan calculations | $360,000 |
For a solo 401(k), the structure that fits most owner-operated businesses, the practical maximum is $72,000, or $80,000 at age 50 and up, or $83,250 at ages 60 through 63. Most of that lives on the employer or profit-sharing side, which is exactly the part that gets left out when people quote the deferral limit alone. One warning: if your prior-year wages from the business exceed the indexed threshold set by SECURE 2.0, catch-up contributions have to be made as Roth. Confirm your position before you fund.
Because Florida has no personal income tax, both of these deductions are purely federal. There is no state add-back to plan around and no state benefit to stack, which makes the federal math the whole conversation.
Know what a hire actually costs before you make it
Do not budget a hire off salary. Employer costs for benefits and legally required contributions add roughly 30% on top of base wages for the average private-industry worker, according to the Bureau of Labor Statistics Employer Costs for Employee Compensation release for March 2026: $46.60 per hour worked in total, made up of $32.60 in wages and salaries (69.9%) and $14.01 in benefits (30.1%). At 2,080 hours, that averages out to roughly $97,000 a year for a full-time private-industry position.
Use the multiplier rather than the average. A $60,000 salary carries a fully loaded cost closer to $78,000 to $85,000, depending on what you offer. For a Florida employer, that loading includes the employer share of Social Security and Medicare (7.65%, with the Social Security portion capped at a wage base that is indexed annually), federal unemployment tax on the first $7,000 of each employee's wages, Florida reemployment tax on its own low per-employee wage base at the rate the state assigns you, workers' compensation, and any benefits. You do not administer state income tax withholding in Florida, which saves admin time but does not reduce the cost.
Then check the number against your books: what is your revenue per employee today, and does your current gross margin cover the fully loaded cost with room left over? Your P&L answers that in about five minutes if it is segmented properly.
Paying contractors: the $2,000 threshold and its exceptions
Congress, not the IRS, raised the reporting threshold to $2,000 in the One, Big, Beautiful Bill Act for payments made after December 31, 2025. It is indexed for inflation starting in calendar year 2027, so the figure will move.
There is no single "1099 threshold." Different forms and payment types have different ones.
| Form or payment type | 2026 reporting threshold |
|---|---|
| 1099-NEC, nonemployee compensation | $2,000 aggregate per payee, per calendar year |
| 1099-MISC, rents and other income | $2,000 |
| 1099-MISC, royalties and substitute payments | $10 |
| 1099-MISC box 10, gross proceeds paid to attorneys | $600 |
| Direct sales of consumer products for resale | $5,000 |
| Fishing boat proceeds | Any amount |
| 1099-K, cards and third-party networks | More than $20,000 and more than 200 transactions |
The exception that catches people: backup withholding. If a contractor does not give you a valid TIN on Form W-9, you have to backup withhold, and any payment you withheld on requires a Form 1099-NEC no matter how small, including a $200 payment. So collect a W-9 from every contractor before the first payment, regardless of how little you expect to pay them. Also note the test is aggregate per payee for the year, not per engagement, and the deduction never changed. Payments under $2,000 are still fully deductible business expenses; only the paperwork went away. If you pay contractors in a state that has its own income tax, that state may still use a $600 threshold, because federal law did not change state rules. Florida has neither.
Paying a contractor who is not a U.S. person is a completely separate regime. You collect Form W-8BEN or W-8BEN-E, report on Form 1042-S, and withholding of up to 30% can apply depending on where the services were performed and whether a treaty applies. The $2,000 threshold has nothing to do with it.
The QBI deduction, minus the headline
Section 199A is now a permanent part of the tax code, and it lets many pass-through owners deduct up to 20% of qualified business income. It is not automatic.
- Below the 2026 threshold amounts of $201,750 of taxable income (single) or $403,500 (married filing jointly), the deduction is straightforward.
- Above those thresholds, W-2 wage and qualified property (UBIA) limits phase in, over ranges that were widened to $75,000 (single) and $150,000 (joint).
- If your business is a specified service trade or business, which includes accounting, law, health, consulting, financial services, athletics, and performing arts, the deduction phases out entirely above $276,750 (single) or $553,500 (joint). A consultant over that number gets nothing.
- There is now a minimum deduction of $400 for taxpayers with at least $1,000 of QBI from an active trade or business.
- QBI generally does not cover income that is not effectively connected with a U.S. trade or business, which matters if you are a non-resident owner of a U.S. entity.
For a Florida owner with no state income tax, QBI is the single biggest lever on your effective rate, and it interacts with S corporation reasonable compensation: W-2 wages reduce QBI, but above the threshold they can create the wage base the limit requires. That is a modeling exercise for your specific numbers, not a rule of thumb.
What "permanent" actually means after OBBBA
You will read that the 2017 tax law was made permanent. That is too broad to plan on.
Permanent: the individual rate brackets, the higher standard deduction ($16,100 single and $32,200 married filing jointly for 2026), Section 199A, and 100% bonus depreciation for property acquired after January 19, 2025. Also permanent and not in your favor: the excess business loss limitation under Section 461(l) and the repeal of miscellaneous itemized deductions. Reversed rather than extended: domestic research and experimental costs went back to immediate expensing instead of amortization. Temporary: the tips, overtime, car loan interest, and senior deductions run only through 2028, and the raised SALT cap reverts in 2030. Do not build a five-year plan on the temporary items.
Get your books loan-ready before you need the loan
Lenders read financial statements, and clean books shorten underwriting. That is the honest version of the claim.
"Auditable" is not a lending standard. Lenders distinguish among audited, reviewed, and compiled statements, which carry very different levels of CPA assurance and very different costs. SBA 7(a) underwriting for standard loans generally asks for around three years of business tax returns and financial statements, plus interim statements and a debt schedule. We are not going to tell you that clean books buy you a specific rate improvement, because no published data supports that. What we will tell you is that applications stall on missing or inconsistent documentation far more often than on the underlying numbers.
Separate closing the month from reviewing it
These are two different jobs, and conflating them is why monthly reviews get skipped.
Closing the month means reconciling every bank and credit card account, clearing uncategorized transactions, reviewing AR and AP aging, checking undeposited funds and opening balance equity, and booking any accruals. That takes real time, whether you do it or someone does it for you.
Reviewing the month takes about 30 minutes once the books are actually closed. Read the P&L, the balance sheet, and the cash flow statement, and answer three questions: where did we overspend, what drove revenue, and are we on pace for the annual target?
Florida gives you natural anchors for the calendar. Sales and use tax returns are due the first of the month following the collection period and are late after the 20th, at the filing frequency the Department of Revenue assigns based on your tax volume. If you sell taxable goods, your county's discretionary sales surtax applies on top of the state rate, and for a single sale of tangible personal property the surtax generally applies only to the first $5,000, a cap that does not apply to every transaction type. Reemployment tax reports are quarterly. Your annual report with the Division of Corporations is due by May 1, and the late fee is flat and not waived. If you operate as a C corporation, or an LLC taxed as a corporation, Florida corporate income tax applies at 5.5%; S corporations and most pass-throughs do not pay it.
What to do next
- Add class, location, or job tracking to your chart of accounts and separate direct costs from overhead, so margin by revenue stream is a report instead of a project.
- Split your 2026 mileage log at June 30 and apply both rates.
- Collect a W-9 from every contractor you have paid this year, including the ones under $2,000.
- Ask about the employer side of your retirement plan before year end, and confirm plan establishment and funding deadlines for your entity type.
- Model your QBI position against your projected taxable income and whether your business is an SSTB, before December, not in April.
- Put two recurring dates on the calendar: a close date and a 30-minute review a few days later.
If you want that rhythm handled for you, Accounting BOSS closes the books monthly and delivers reporting for small businesses in Orlando, Jacksonville, and Miami, and for non-resident founders running U.S. entities. Contact us and we will start with a look at how your accounts are structured today.
This article is general information, not tax advice for your situation. Figures cited are for the 2026 tax year and several are indexed annually. Confirm current amounts before you file.
This is general information, not tax advice for your situation, and reading it does not make you a client. Rules and figures change — verify anything time-sensitive before you act on it. We'll talk it through with you free.
Common questions
There are two. The IRS set 72.5 cents per mile for January 1 through June 30, 2026, then revised it to 76 cents per mile for July 1 through December 31, 2026 because of fuel prices. You have to track business miles in two buckets and apply each rate to the correct half of the year. The medical and qualified moving rate rose from 20.5 to 23.5 cents on the same date, and the charitable rate stays at 14 cents because it is fixed by statute.
Usually no. The threshold for Form 1099-NEC is $2,000 aggregate per payee per calendar year for payments made after December 31, 2025, and it is indexed starting in 2027. But there is an exception that overrides the amount: if the contractor never gave you a valid TIN on Form W-9 and you had to backup withhold, you must file a 1099-NEC regardless of how small the payment was. That is why you should collect a W-9 from every contractor before the first payment. Either way, the payment is still fully deductible.
The $24,500 figure you see quoted is only the employee elective deferral limit. Add the employer or profit-sharing contribution and the combined annual additions limit is $72,000 for 2026, or $80,000 with the age 50 catch-up, or $83,250 at ages 60 through 63. A SEP IRA is capped at the lesser of 25% of compensation or $72,000. Stopping at the deferral limit can mean leaving tens of thousands of dollars of deductible retirement savings unused.
Not always. Below the 2026 threshold amounts of $201,750 of taxable income for single filers or $403,500 for joint filers, it generally applies cleanly. Above that, W-2 wage and qualified property limits phase in. If you are in a specified service trade or business, such as accounting, law, health, consulting, or financial services, the deduction phases out completely above $276,750 single or $553,500 joint. There is also a new minimum deduction of $400 if you have at least $1,000 of QBI from an active business.
Budget the loaded cost, not the salary. Benefits and legally required contributions add roughly 30% on top of base wages for the average private-industry worker per BLS data for March 2026, so a $60,000 salary typically costs $78,000 to $85,000 all in. For a Florida employer that includes the employer share of Social Security and Medicare, federal unemployment tax, Florida reemployment tax, workers' compensation, and any benefits you offer. Florida's lack of state income tax withholding saves administration, not money.
There is no official standard. Our recommendation is three to six months of fixed operating expenses, weighted toward the higher end if you have concentrated customers, slow receivables, or seasonal revenue. Florida adds a specific reason to hold more: hurricane season runs June 1 through November 30, and a closure week or a delayed insurance payout hits your bank account well before it shows up in your financial statements.